dominated the
market with its pioneering browser technology, has been forced in the past
couple years to shift its business focus away from its browser roots as
software giant Microsoft has
steadily chipped away at the company's market share

Netscape was cofounded in 1994 by Silicon
Graphics founder Jim Clark after he saw the programming handiwork that allowed nontechnical
users to easily navigate the Internet, created by
Marc Andreessen, then a 22-year-old student.

In Netscape Time, the working title for a book by Clark that is slated to
be published next spring by St. Martin Press, Clark gives a first-person
account of meeting browser guru Andreessen, working together to figure
out "the next big thing," and eventually giving birth to Netscape.

And indeed, they struck gold.

The company's revolutionary Web navigation technology, Netscape Navigator
browser, allowed users to experience the Net as pictures, texts, and sounds
with a click of a button rather than having to enter arcane programming
codes.

At the new company, Clark became chairman; Andreessen became vice president
of technology, and James Barksdale became its CEO and president. Together,
these executives are commonly known in the industry as "Clark, Bark, and Marc." Barksdale has been offered a seat on AOL's board.

When the company went public in 1995, after less than two years in operation
and still far from posting any profits, it followed the now legendary market
"moon shot" that often is associated with the explosive rise of the Internet
and Silicon Valley's accompanying fortunes.

But Microsoft, nervous that this technology would render its
Windows
application obsolete, entered the market with its own browser, Internet
Explorer, even giving it away for free.

With this aggressive marketing strategy, the software giant gained ground on
Netscape, forcing the smaller company to also start giving its browser away
to try to hold on to its lead. Although Netscape still has the lead with
just more than half the market, at least according to some counts, it is a paltry showing compared to the days when
it controlled more than 80 percent of the market.

The confrontation between Microsoft and Netscape not only
drained Netscape of a revenue stream from its browser, but also led to sagging morale at the start-up. In January, Netscape announced that it would cut 300 jobs--the first layoffs in the company's history. At the time, recruiters cautioned that the company could have difficulty holding on to the programmers that were not given pink slips because those employees would fear that this round of cuts was the first of many.

America Online, the largest Internet access
service, hit Netscape hard when it made Microsoft's Internet

Marc Andreessen

Explorer
browser its default in 1996, giving Microsoft what many saw as a huge edge
in the battle for browser market share. That deal, however, sowed some of
the seeds of the antitrust trial now underway in Washington against
Microsoft by the federal government and 20 states.

An AOL executive last month testified that AOL chose the Internet Explorer
browser instead of Netscape's because it received a coveted spot on the
user's desktop from Microsoft. Last week, rumors surfaced that AOL and
Netscape were in negotiations over making Navigator the online giant's
default browser.

While Netscape may have a slight market lead, it doesn't seem to have the
upper hand in the browser battle. Instead, the company has shifted its focus
toward its Web portal and back-end software business.

Netscape's Netcenter competes against the likes of other Web portal giants
such as Yahoo, Excite, and Lycos. Netscape's Navigator software still
gives a boost to Netcenter as people visit the site to download the browser.

Netscape today has also branched into creating the software that runs and
manages computer servers that run Web sites.

The dynamics are likely to change drastically with the possible acquisition
of Netscape by America Online, a stock swap deal that the companies
confirmed they are discussing. As part of the possible pairing, Sun Microsystems also could gain control of
Netscape's business software operations. If completed, the deal would help
both AOL and Sun compete against Microsoft.

A merged AOL and Netscape would result in an online powerhouse, combining AOL's 14 million subscriber service with a strongly branded Netscape portal site. The move would add bulk and muscle to both their services in the battle against Microsoft's MSN site.

In early November, after four years and seven months with the company he
cofounded, Andreessen stepped back to take a sabbatical from Netscape.
Although the sabbatical is not Andreessen's first vacation, it will be his
longest absence from Netscape to date. He is expected to return to work
January 4.

Andreessen, who this month invested an undisclosed amount of his personal
funds in Replay Networks, might spend
part of his sabbatical at the small Silicon Valley start-up whose technology
he said may do for television what Netscape did for the Net. Replay Networks
is developing digital television recording systems that it hopes will
replace today's traditional home videocassette recorders.

Based in Mountain View, California, Netscape currently employs more than 2,000
people in 17 countries and reported revenues of $346 million in 1996, as
compared to $85 million in 1995. The company expects to release its
financial results tomorrow for fiscal quarter and year ended October 31.